What We Know About Diasporas and Economic Development

Diasporas can play an important role in the economic development of their countries of origin. Beyond their well-known role as senders of remittances, diasporas can also promote trade and foreign direct investment, create businesses and spur entrepreneurship, and transfer new knowledge and skills. Although some policymakers see their nationals abroad as a loss, they are increasingly realizing that an engaged diaspora can be an asset — or even a counterweight to the emigration of skilled and talented migrants.

The impact of diaspora engagement is difficult to assess, due to the difficulty disentangling causation and correlation, and quantifying the impact of elusive goods like skills and knowledge transfers. However, we do know that governments can certainly do more to remove obstacles and create opportunities for diasporas to engage in economic development. Specific actions include identifying goals, mapping diaspora location and skills, fostering a relationship of trust with the diaspora, maintaining sophisticated means of communication with the diaspora, and ultimately encouraging diaspora contributions to national development. Governmental diaspora-focused entities in countries of origin need to play a dual role, both facilitating diaspora contributions to the homeland, and serving the diaspora.

Media Resources

Authors

Kathleen Newland is Co-Founder of the Migration Policy Institute and directs its Migrants, Migration, and Development program.
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Sonia Plaza is a Senior Economist in the Development Economics Prospects Group at the World Bank. She has worked on science and technology projects in Latin American and coauthored a major analytical survey of migration and development for the Africa region. Full Bio >

In the Spotlight

Free Book Download: Diasporas: New Partners in Global Development Policy

​The volume, which examines the development impact of diasporas in six critical areas—entrepreneurship, investment in countrty-of-origin capital markets, heritage tourism and trade, philanthropy, volunteering, and advocacy—is now available to download for free in its entirety.

Migrants, Migration, and Development

MPI's Migrants, Migration, and Development Program focuses on the intersection of migration and development policies and trends, moving beyond simple notions that development is a “cure” for migration or that migration is a recipe for development.